How the most recent economic trends affect your business
Photo by Burak The Weekender
According to experts’ predictions, rising inflation and tax increases would cause the economy to grind to a halt and gradually shrink in the second half of this year. Recent forecasts by experts have indicated that the economy has shrunk as the outlook for recession darkens. However, there is a glimmer of hope, as the economy constantly changes, making it difficult to predict what the future holds for businesses. That notwithstanding, it’s important to understand the major trends that will likely impact businesses in the coming years. This way, if you’re a business owner, you can make more informed decisions about the future. Here are some recent economic trends and how they impact your business.
1. Digital transformation
Digital transformation is rapidly gaining ground worldwide. As a result, many businesses are taking bold steps to incorporate as many digital changes into their operations as possible. This digital drive has partly been geared towards meeting a new, rising force of remote workers. As exciting as this can be, the digital transformation process has not necessarily been smooth throughout, as many businesses admit to experiencing varying degrees of digital transformation challenges. According to recent surveys, four out of five businesses cannot scale their digital transformation plans. That means only 20% of businesses have admitted that they are in a position to meet their digital transformation goals.
What does this mean for your business? If your business happens to be part of the 20% success story, then there is reason to be optimistic about the future since digital transformation is expected to grow at a CAGR of 22% from 2022 to 2030. Additionally, the transformation market size is expected to reach over £130 billion by 2030, meaning there is much to gain by making the digitization shift. For businesses still struggling to scale digitally, there is a growing amount of research, knowledge, and data that can help such businesses overcome their transformation challenges. As a business that seeks to evolve constantly, it is essential to adapt to the global digital transformation.
2. Inflation
Inflation can affect businesses in many ways, in various aspects such as supply chain, consumer habits, and so on. Inflation is expected to hit the 10% mark by 2030 as fuel prices continue to soar. Various experts have advised business owners to expect a tough ride in 2030. According to the BBC, corporate investments are also more likely to fail next year as political and economic uncertainties and growing cost constraints continue to hamper the ability of small companies to invest.
3. Labour changes
Recent labour market overviews indicated that the number of self-employed and full-time workers increased this year. In contrast, the number of part-time employees appears to have reduced in recent months. While there is an increase in full-time employees, the job market still witnessed record vacancies as demand for talent increased. As a result, employed people now have more job vacancies matching their skills than before the recent pandemic. That is because more people are leaving the labour force entirely rather than looking for work or failing to find jobs. This trend means business owners will need to offer attractive employee rewards to lure new talents as more people are considering starting their businesses.
Despite the various economic challenges worldwide, the picture is not entirely gloomy. There may still be opportunities for your business to adapt and find innovative ways to respond to these trends.
